Merrill Lynch…in Name Only

Bank of America Corp. could merge its Merrill Lynch & Co. subsidiary into the parent company as early as the fourth quarter of the year, according to a regulatory filing.

Under the possible move, Merrill Lynch would continue to be a unit of BofA and its branding wouldn’t change. But Merrill would no longer be required to file separate financial statements with U.S. regulatory agencies, leaving investors to turn to the larger bank’s filings to figure out what is happening at the unit.

Bank of America, the second-largest U.S. bank by assets, bought Merrill Lynch in 2008. The Charlotte, N.C., based bank began slashing legal entities in 2010 as part of Chief Executive Brian Moynihan‘s strategy to streamline the company and new regulatory pressure to simply its structure so the bank could be easily unwound if necessary in the case of another financial crisis.

The reduction in subsidiaries, which recently tallied 4,000 at the bank according to research firm Bureau van Dijk Electronic Publishing Inc., could also save costs at a time when banks’ returns have been sluggish. A Bank of America spokesman said that the number of its subsidiaries dropped 25% between 2008 and 2012, to 1,537. That figure includes only what the bank deems to be significant entities.

The completion of the merger would end the life of a legal entity that was formed 40 years ago. Merrill Lynch was founded in 1914 and became a publicly traded company on June 23, 1971. In 1973, the Merrill Lynch holding company was created. Now, the investment bank is run by Thomas Montag and has its own small board of directors, including Bank of America Chief Executive Brian Moynihan.

“This will have no impact on how we serve our customers and clients and will have no impact on the Merrill Lynch branded businesses,” said a spokesman.

The bank has previously disclosed its efforts to merge Merrill Lynch into the larger firm, but for the first time earlier this month said it could complete the process by the fourth quarter. In completing the merger, Bank of America will take over all of Merrill Lynch’s obligations, including all U.S. and foreign-debt securities issued by the investment bank. News of the legal-entity merger was reported earlier by Bloomberg News.

Regulators have been pushing since the financial crisis for banks to reduce complexity. The task has been unwieldy. The first round of plans submitted by the banks last year, known as “living wills,” ran as long as 4,000 pages. Bank of America’s plan cost roughly $150 million to produce, according to people close to the company.